A price elasticity of demand of 2 means that a 10 percent increase in price will result in a:

a) 20 percent increase in quantity demanded.
b) 2 percent decrease in quantity demanded.
c) 5 percent decrease in quantity demanded.
d) 2 percent increase in quantity demanded.
e) 20 percent decrease in quantity demanded.

Ans: e) 20 percent decrease in quantity demanded.

Business

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